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Australia – Star shines thanks to international VIPs

By - 30 August 2016

Australian operator Star Entertainment The Star Entertainment Group reported full-year net profit up 15 per cent as it benefited from an increase number of Asian VIPs.

The Star’s net profit for the year to June 30 increased by 14.9 per cent to A$194.4m, reflecting good growth across its domestic gaming business, particularly The Star in Sydney.

Overall revenue was up six per cent to A$2.27bn whilst revenue from its International VIP segment increased by seven per cent to a record A$49.5bn for the year.

The operator is in the process of adding more hotel rooms and improving gaming facilities at The Star in Sydney and Jupiters on the Gold Coast, as it looks to attract more tourists from Asia.
Chief executive Matt Bekier said:”The big impact of disruption is that we can’t put high-value guests into those rooms because there is jackhammering, problems with access and so on. Disruption from capital investment works across the gaming and non-gaming business will continue to impact revenues and earnings into FY2017, although the impact is expected to reduce in the second half.”
The group has partnered with Chow Tai Fook Enterprises (CTF) and Far East Consortium (FEC) for its Destination Brisbane Consortium (DBC) project.

Chairman John O’Neill AO added: “Detailed planning is progressing on this landmark partnership with the Queensland Government. Queen’s Wharf is an important strategic step for the Group, securing our long-term position in the Brisbane market and demonstrating our commitment to Queensland and tourism. We continue to develop opportunities to further our relationship with Chow Tai Fook Enterprises (CTF) and Far East Consortium (FEC)by leveraging our respective assets, operational capabilities and market expertise. We are well advanced with our partners to secure additional joint venture investment opportunities to expand and improve the value proposition of our properties in Sydney and the Gold Coast.”

The Star Sydney saw revenue increase in FY2016, with good volume growth across all lines of business offsetting the impact of disruption from capital works. Domestic gaming revenue was solid across both tables and slots.

Managing Director and Chief Executive Officer, Matt Bekier said: “The continued improvement in The Star Sydney’s results validates the Group’s strategy of investing in its properties, with continuing focus on our brand, loyalty program, guest satisfaction and staff engagement delivering a differentiated value proposition to our 11 million customers.”

Queensland experienced a small decline in normalised and actual gross revenue in FY2016, as revenue growth in domestic tables and slots was offset by disruption at non-gaming facilities at the Gold Coast property.

Mr Bekier said: “FY2016 has been a year of transition for our Queensland business, as capital works activity at the Gold Coast increased. Initial customer response to the new VIP salons, refurbished hotel rooms and new restaurants has been pleasing. There has been no material change at Treasury Brisbane over the year. Operating expenses remain well managed across both properties.”

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